12A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:Qd = 25,000 5,000P+ 25MeBookPrintReferencesQs = 240,000 + 5,000P-2,000P1where P is price, M is income, and P₁ is the price of a key input. The forecasts for the next year are M = $15,000 and P₁= $20. Average variable cost is estimated to beAVC= 14 -0.008Q + 0.000002Q²Total fixed cost will be $6,000 next year. Suppose that income next year is forecasted to be $10,000 instead. What is the revised price forecast for next year?Multiple ChoiceOOOO$5.00$7.50$15.75$10.50$12.00 14eBookPrintReferencesSport Tee Corporation manufactures T-shirts bearing the logos of professional football teams. The wholesale market for sport T-shirts is perfectly competitive. The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost isSMC=12 -0.005Q+0.0000008²where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month. Monthly profit will beMultiple Choice-$2,000.-$1,150.$4,250.$3,400.$2,250.

Market demand refers to the total quantity of a good or service that consumers are willing and able…

12 A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: Qd = 25,000 - 5,000P + 25M eBook Print References Qs = 240,000 + 5,000P-2,000P₁ where P is price, M is income, and P₁ is the price of a key input. The forecasts for the next year are M = $15,000 and P₁= $20. Average variable cost is estimated to be AVC=14-0.008Q + 0.000002Q² Total fixed cost will be $6,000 next year. Suppose that income next year is forecasted to be $10,000 instead. What is the revised price forecast for next year? Multiple Choice O O $5.00 $7.50 $15.75 $10.50 $12.00

12 A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: Qd = 25,000 - 5,000P + 25M eBook Print References Qs = 240,000 + 5,000P-2,000P₁ where P is price, M is income, and P₁ is the price of a key input. The forecasts for the next year are M = $15,000 and P₁= $20. Average variable cost is estimated to be AVC=14-0.008Q + 0.000002Q² Total fixed cost will be $6,000 next year. Suppose that income next year is forecasted to be $10,000 instead. What is the revised price forecast for next year? Multiple Choice O O $5.00 $7.50 $15.75 $10.50 $12.00

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 6E: The economic analysis division of Mapco Enterprises has estimated the demand function for its line...

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